while considering depreciation for fixed assets should we consider value added tax paid as asset or expenditure.
2 Replies
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 04 March 2017
if you could take the input credit for the asset vat amount will not form part of cost of fixed assets
Sanjay S
(Chartered Accountant)
(1375 Points)
Replied 05 March 2017
Depreciation is all about splitting the Total Capitalised Amount over a number of years.
If you have not capitalised the VAT amount, then you obviously cannot take depreciation. [eg. Whn you have taken input tax credit of VAT paid on capital goods, you cannot capitalise such VAT]
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